Social Security

Government should give people the choice to invest their retirement dollars as they choose. NO! Correction: government does NOT have the right to dictate our investment choices. After all, it is our money. Our rights come not from government. "We are endowed by our Creator" with our rights...." to which the Laws of Nature and of Nature's God entitle them." We should prevent the government from dictating how we invest OUR money.

The basic Rule of 72 displays how money doubles: Rate X Time = 72. Hence at 10% money doubles every 7.2 years since 10 X 7.2 = 72. Similarly, one can ask, "How long would it take money to double at 5%? 5 X __?___ = 72. Dividing both sides by 5 we find the answer is 14.4 years.

The 1/4 Million Dollar Toaster:

Assume two people each have $1000 to invest at age 20. You invest in a bank at 5% (quite a generous rate). And you get a gift: a free book bag, a lovely thermos, or toaster. The Rule of 72 enables us to track your money growing, doubling, every 14 years.

Age Amount20 100034 200048 400062 800076 16,000

You can buy a modest car, but not retire well, or at all. And enjoy your "free" 50 year old toaster. I, on the other hand, invest in the stock market which historically has delivered over 11% returns. I invest below average and only earn 10%. My money doubles every 7 years.

I have a 1/4 million dollars. I can retire, even without a "free" no toaster. If I invest 1000 four times in my late teens and/or early 20's, I will have 4 x 1/4 million dollars = over a million. I retire a millionaire from a $4000 investment. Happy retirement, and I believe I can buy my own toasters.

But Social Security returns not 10%, nor 5%. It returns 1%. Hence: 1 X 72 years = 72. So it takes 72 years for money to double:

Age Amount20 100096 2000

You are not going to live long enough to see it double again at age 168. And you get no "free" toaster.

Moreover, you pay FICA/Social Security tax from every paycheck: a 7.5% tax (which your employer is required to match. Assuming you make only $10 an hour all your life, from age 20 to 50 you earn 20,000 a year X 50 years = $1,000,000: one million dollars. The government confiscates over $75,000 FICA/social security tax from you. And another $75,000 from your employer who could have paid it to you. An average social security check is about $1100. You pay $75,000 to $150,000 to receive $1100 a month. But investing $4000 which makes you a millionaire, allows you to put your million in a bank or CD and earn, let's say 4% interest. That delivers 40,000 a year, or almost $4000 a month. For life. Without ever touching the principle. And you leave a million dollars to your loved ones. Social security leaves them a one time lump sum death benefit of, wait for it, $255. Yes, children under 19 may receive a small payment until they graduate school, but parents passing away in their early 60's usually don't have minor children. Furthermore, if you pass away before beginning to collect social security, and have no minor children, $255 is all you leave your kids. And given that early retirement is age 63, and the average age of death is as follows, many people don't live long enough to receive even a fraction of what they contributed, let alone what their money COULD have earned: